Europe: What to watch out for in 2016-2017

The report identifies critical risks for the EU in 2016-2017, including stagnating labour productivity, the challenges of integrating migrants, geopolitical instability from Russia and the Middle East, and the potential for a 'Brexit' vote. It argues that while a cyclical economic upswing is present, long-term growth is threatened by an ageing workforce and a lack of digital competitiveness. The document concludes with two contrasting scenarios for 2026, illustrating how current policy choices regarding the single market, migration, and foreign policy will determine whether the EU becomes an effective crisis-fighting mechanism or suffers an irreversible setback.

• The EU faces a long-term growth crisis driven by a shrinking working-age population and stagnating labour productivity, which has remained at approximately 0.5% since 2010. The report warns that there will be 16 million fewer people of working age by 2030, even if net migration remains steady.
• European digital competitiveness is hindered by a focus on data privacy and protection over innovation, and a significant ICT skills gap of 900,000. The report suggests that a Digital Single Market could potentially add €340 billion annually to the EU economy.
• Migration is viewed as a structural economic opportunity to offset an ageing population, but its success depends on the public and private sectors' ability to integrate arrivals into the labour market. In Germany, only 8% of working-age refugees found jobs in their first year, rising to 50% after five years.
• The EU's geopolitical environment has deteriorated since 2014, characterized by a 'revisionist Russia' and instability in the Middle East. The report notes that the EU lacks a coherent common foreign and security policy, with member states often acting independently.
• A potential 'Brexit' is identified as a major risk that could cause an 'irreversible setback' to the European integration project. Beyond the UK's own domestic turmoil and possible disintegration (specifically Scotland), a leave vote could trigger similar referendums in the Netherlands, France, and the Czech Republic.
• Monetary and fiscal policies in the Eurozone risk becoming pro-cyclical. The European Central Bank's extended bond-buying programme may increase the risk of asset bubbles and misallocation of capital, while 'austerity fatigue' may lead to a lack of rigorous fiscal oversight.

APA

Barysch, K., Bildt, C., de Croo, A., Dassu, M., Gros, D., Niblett, R., Maduro, M. P., & Spelman, M. (2016). Europe: What to watch out for in 2016-2017. World Economic Forum. http://www3.weforum.org/docs/GAC16_Europe_What_Watch_Out_for_2016-2017.pdf

Chicago

Barysch, Katinka, Carl Bildt, Alexander de Croo, Marta Dassu, Daniel Gros, Robin Niblett, Miguel Poiares Maduro, and Mark Spelman. Europe: What to watch out for in 2016-2017. World Economic Forum, 2016. http://www3.weforum.org/docs/GAC16_Europe_What_Watch_Out_for_2016-2017.pdf.

Wikipedia

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BibTeX

@techreport{barysch2016europe, author = {Barysch, Katinka and Bildt, Carl and de Croo, Alexander and Dassu, Marta and Gros, Daniel and Niblett, Robin and Maduro, Miguel Poiares and Spelman, Mark}, title = {{Europe: What to watch out for in 2016-2017}}, institution = {World Economic Forum}, year = {2016}, month = feb, url = {http://www3.weforum.org/docs/GAC16_Europe_What_Watch_Out_for_2016-2017.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }